Party drops plan to cut jobs as cash crunch bites

The ANC has aborted its controversial retrenchment process because it does not have money to pay severance packages to affected employees.

The governing party also does not have money to settle cumulative arrears of its employee’s pension fund account, which are estimated to be over R150-million.

This, after the party deducted the funds from employees’ salaries but failed to pay them for at least 28 months.

The organisation, which has been plagued by constant failure to pay salaries for its 387 staff and several service providers since the beginning of this year, had planned to retrench 50% of its permanent staff to reduce its bloated salary bill, which stands at R18-million a month.

However, two staff members who did not want to be named for fear of reprisals said they were informed by human resources officials that the retrenchment process had been abandoned.

“We have been advised by HR that the process is too expensive for the party because it has to pay severance packages for employees who will be affected by these looming retrenchments.

“There are employees who have been working there for more than 15 years, so in terms of the law, you can’t just retrench them and not pay them severance packages. So, there is no money to pay these severance packages, that is why that process has been aborted,” said the staffer.

Another staffer said: “Last year they were owing the provident fund over R100-million, and this year we were told it is over R150-million.

“This is a problem because there are staff members who died, and their families would not get their provident funds because they were not paid. It’s a mess,” added the staffer.